Stock price when the opinion was issued
One of the things his team's looking at right now is that it seems some of the regulations surrounding the semiconductor industry will be reduced (specifically China, but other countries as well). That could mean an expanded market for the semi manufacturing equipment companies, such as KLAC. AVGO has also been a strong performer, and he owns some NVDA. Those two names have strong relative price performance, are economically sensitive, cyclical, and have pricing power.
Considers the US restrictions as short-term obstacles. Stock's starting to rebound quite nicely. The leader today in AI computing, and for the foreseeable future. Strong global thirst and demand for AI infrastructure. Unmatched advantages compared to other names in the space. Data centres are driving growth. Recent earnings beat.
AI adoption is still in very early stages. Still trading at 1x PEG ratio. Earnings growth is not reflected in the valuation. Sees EPS at 33% going forward. Yield is 0.03%.
Used to make 75% gross margins, but those have jumped to 90%. If it goes back to historic gross margins, even if sales continue, you'll see a huge degradation in profit. Sweet spot in terms of demand. Market thinks it can do no wrong. Worries that demand will abate or just normalize. Good news is baked in. Watch your position size.
Today's the big day. Short-dated options from market makers show NVDA trading about 8-8.5% on either side of the close at end of day. A lot of the market makers will have to cover on their options, probably more so to the downside.
(Analysts’ price target is $154.25)Last time it reported in August, it was a great report with OK guidance, but over the next couple of days it traded from $125 all the way down to $95. You're going to have some opportunities to get in. For him, you have to own it, must be one of your top picks.
Right now, the largest market-cap company in the world, about $3.6T. If you extrapolate on its growth rate which is conservatively in the low 20%s, then market cap by 2029 could be anywhere between $5.6-6.3T. And that will be reflected in the stock. We can say this because it's really cornered the market on data centre accelerator chips; no one is even close.
Now at $146, so runway is a bit short. However, it owns 88% of the accelerator chips in data centres, which are the big buyers out there. Some hyperscalers are starting to build in-house chips which will eat into its business, but at the same time governments are ramping up. Plus, there's still the gaming side, which contributes about $10B a year. Automotive chips too -- right now $3B, but estimated to be in excess of $20B by 2029. Lots of horses in the race.